'Project specific bond could be issued to finance fast-track road project'

Published On: February 21, 2017 01:20 AM NPT By: Republica


A committee led by National Planning Commission (NPC) Vice Chairman Min Bahadur Shrestha, formed to look into the possible modality for developing Kathmandu-Tarai Fast Track Road Project, study whether the DPR prepared by the IL&FS could be of any use, and find possible sources of financing, submitted its report to Prime Minister Pushpa Kamal Dahal on Monday. The government had formed the committee on November 21 after terminating all agreements and contracts with the Indian consortium led by Infrastructure Leasing and Financial Services (IL&FS) regarding the development of the fast-track project. 
Below is the gist of the report that Shrestha shared with Republica's Sagar Ghimire

DPR 
If we make new Detailed Project Report (DPR), it will be better and updated compared to the old report. It, however, would time-consuming. This is going to increase cost. Also, we have already acquired the land for the project, aligning with the previous DPR. Since land acquisition has been done based on the previous report, we do not have the luxury to make much change on it. Land acquisition on only the six kilometer stretch in Khokana is remaining.


So, we have recommended using the old DPR because that is going to be quick. We can immediately start working on the project based on that report. But IL&FS may not provide us DPR free of cost. We have decided to get the DPR after holding negotiations with the Indian consortium. 

Modality 
Regarding procurement modality, it cannot be done in the old modality as we have to complete the project as soon as possible. We can set up either a company or form a development committee as the special purpose vehicle. The entity thus established will get the DPR after reaching to an agreement with the company. We have recommended awarding three separate contracts to build the project as soon as possible. These three contractors would start working on three different stretches. 

Resources
We have suggested that the government mobilize domestic resources to build the project. We have allocated Rs 10 billion for the project in the current fiscal year 2016/17. There is no problem in allocating Rs 20-30 billion every year for this project. The estimated cost of the project is Rs 100 billion. It can be built in three to five years. There is also a possibility of issuing project specific development bond to arrange financial resources for this expressway. 

Project duration 
I think this can be completed in three years if three packages move together. So, let's give a short duration to three packages and complete it in three years rather than taking five years by awarding tender to one or two contractors. 

Process
We have handed over the report to the Prime Minister. Similarly, the Prime Minister has handed over the report to the Minister for Physical Infrastructure and Transportation which will be tabled in the cabinet for endorsement. The endorsement of the report will pave the way for implementing the much-awaited project.


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